Does the Fitstop FDD Item 6 specify if the other fees for a Fitstop franchise are refundable?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
OTHER FEES**
| Indemnification | The costs and expenses we incur in connection with your breach or default under your Franchise Agreement or otherwise in the ownership and operation of your Franchised Business. | As incurred by you. | You are solely responsible and must indemnify and hold us harmless for all loss, damage, claims or demands arising from your Franchise including, but not limited to, any joint employment claims. | |---|---|---|---| | Annual Convention Fee | We expect this amount to be around $1,500 to $2,000 per attendee | Paid monthly by you. | You will also be responsible for covering the costs that attendees incur in connection with attending any such event. | | Merchant payment processing costs | Then-current amount charged by our Approved Supplier (if applicable) Currently, these fees are estimated to be between 2% and 4% of Gross Revenue generated by your Franchised Business on an ongoing basis | Payable immediately once collected by the Current Billing/POS Provider | These amounts are payable to our third-party Approved Supplier for such services as of the Issue Date. | | Interest and/or Late Fees | The lesser of (i) 18% per annum, and (ii) the highest rate permitted for commercial transactions under applicable law | If and as incurred and invoiced | Please note that the maximum interest rate in the State of California amounts to 10% per annum. These amounts may be charged in connection with any fees or amounts that are past due and owing under the Franchise Agreement. |
| Training Fee(s) | Our then-current training fee for the type of training requested or other assistance/training requested by you and/or required under your Franchise Agreement (our "Training Fee") Currently, our Training Fee(s) are as follows: (i) $1,500 for the training that we provide and afford access to each individual that you wish to engage and appoint as an Authorized Instructor | On demand and as directed by us. | Please see Item 11 of this Disclosure Document for additional information. As previously noted in Item 1, as of the Issue Date we are willing to provide the System Instructor Training remotely to you and up to four (4) additional individuals that you determine to engage and wish to appoint as your initial Authorized Instructors of the Franchised Business, provided these individuals complete such training before undertaking or performing any Approved Services to any Franchised Business clientele. |
|---|---|---|---|
| that will be eligible to provide Approved Services at your Franchised Business (the "Instructor Training"); and (ii) $500/day per trainer utilized in connection with all other training we provide beyond the Initial Training Program we conduct with you (plus any out-of-pocket costs we incur) | |||
| Technology Fee | Our then-current technology fee for any technology and related products/services we determine to associate with our then-current System (the "Technology Fee") Currently, our Technology Fee amounts to: (i) 2% of Gross Revenue generated by your Franchised Business over the preceding reporting period; and (ii) if applicable, an additional $12 to $15 per month for a second and each additional System-associated email account provided to or requested by System franchisee. | Same time and manner as your Royalty Fee | Currently, your Technology Fee is used to cover and/or defray the costs associated with various technology that we have associated and, in some cases, developed for us in connection with the System, including: (i) your initial System-associated email address; (ii) certain website maintenance; (iii) the required POS software and certain related services provided by our Current Billing/POS Provider; and (iv) possibly additional software that we are or may designate for use in connection with the operation of your Franchised Business (collectively, the "Required Software"). We may modify our Technology Fee – the amount and/or the technology services or Required Software access we determine to provide as part of said fee – upon at least 60 days' prior written notice via the Manuals or otherwise in writing. |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, Item 6 outlines various 'Other Fees' but does not explicitly state whether these fees are refundable. The fees include indemnification costs, annual convention fees (estimated between $1,500 and $2,000 per attendee), merchant payment processing costs (estimated between 2% and 4% of gross revenue), interest and late fees (up to 18% per annum or the highest rate permitted by law), training fees ($1,500 for instructor training and $500/day per trainer for additional training), technology fees (2% of gross revenue plus $12-$15 per month for additional email accounts), and transfer-related fees (ranging from $750 to $25,000 depending on the transfer type).
Since the FDD does not specify the refundability of these fees, it is important for a prospective Fitstop franchisee to clarify this with the franchisor. Understanding whether these fees are refundable, and under what conditions, is crucial for financial planning and risk assessment. For example, if a franchisee pays for the annual convention fee and is unable to attend, knowing whether a refund is possible is important.
Prospective franchisees should inquire about the specific circumstances under which each fee may or may not be refundable. This information is essential for making an informed decision about investing in a Fitstop franchise. It is also advisable to seek legal counsel to review the franchise agreement and ensure a clear understanding of all financial obligations and potential refunds.